Dissertation > Economic > Trade and Economic > States foreign trade > China's foreign trade > Import and Export Trade Overview > Export trade

The European Sovereign Debt Crisis’ Impact on China’s Goods Exported to EU and Counter-measures

Author HuRiLe
Tutor LanTian
School Dongbei University of Finance
Course International Trade
Keywords European Sovereign Debt Crisis goods trade negative impacts counter-measures
CLC F752.62
Type Master's thesis
Year 2012
Downloads 257
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China, as the economy with the most rapid economic growth rate on the earth has a promising cooperation vista with EU, the largest economy in the world. However, European Sovereign Debt Crisis posts a huge threat to it. In the view of the background, the paper demonstrates the negative impacts of the crisis on China’s goods exported to EU, their reasons and our possible counter-measures.The paper which can be classified into3parts includes6chapters.The first chapter is introduction.The first chapter mainly shows the importance and background of the issue the paper has described. The chapter briefly introduces the significance of Sino-EU trade and the reasons for the crisis’occurring. The part has also introduced dissertation’s structure, writer’s creativity and Chinese and foreign scholars’ opinions about the issue.Main body starts from the second chapter to the forth one.The second chapter details some theories about the issue. They are Intra-industry Trade Theory, Balance of Payment Theory of Exchange Rate and Game Theory. Intra-industry Trade Theory explains the reason why the crisis happens. Balance of Payment Theory of Exchange Rate can be used to explain why Euro had a big devaluation against RMB after the crisis happened. Game Theory elaborates the reason for more trade protectionism measures against China from EU following the crisis.The third chapter mainly states negative impacts on China’s goods exported to EU the crisis brings. Concretely speaking, the impacts includes that trade amount drops a lot because of EU citizens’shrinking disposable income after th What’s more, Euro’s devaluation against RMB brings lots of troubles to Chinese companies. Last but not least, various trade protectionism measures from EU also prevent China from exporting in the previous way.The forth chapter mainly analyses the reason for the impacts mentioned above. The first one is poor diplomatic relations with EU. So far, most of EU member countries have not enough political trust to China. So none of them acknowledge our position of market-oriented economy. What’s more, they have neither ended the arms embargo on us nor realized free trade in the field of hi-tech goods. The second one is China’s economy depends on EU too much, so that we tend to be victim of the crisis. The third one is our wrong strategy to protect our reasonable rights. Most of our companies protect the right alone when they suffer unjust trade policies from EU. Such kind of struggles tends to be in vain owing to their limited power. What’s more, some officials are weaker than the staff in some companies about WTO rules, so sometimes their policies lead our companies to do something against the rules. The fourth one is that the products we produce and export, generally speaking, are worse in the level of science and technology and brand attraction. Therefore, our goods can’t keep the customers during the crisis. Last but not least, EU implements many tighter economic policies in order to reduce impacts the crisis leads to. As a result, the policy weakens local companies’ability to pay on time due to high tax. What’s more, local banks can’t provide enough funds to support these companies due to the policy above, which makes the case tougher. In addition, Euro’s big devaluation against RMB is also an important reason for China’s shrinking goods trade.Both the fifth chapter and sixth one are the conclusion.The chapter mainly discusses possible counter-measures against the negative impacts mentioned above. In front of the crisis, we should come up with effective and efficient counter-measures to guarantee the flourishing situation in Sino-EU goods trade. In detail, we should try our best in the aspects below. First of all, our chiefs should strengthen Sino-EU tie in order to lay a solid political foundation for good bilateral economic relation in the future. Additionally, our officials should keep neck and neck with the time and pay more attention to change their roles in daily management. They should become comprehensive managers who are good at both macro-control and native product promotion instead of a leader who can only manage the state. What’s more, we can invest in EU bonds rationally at right time to lay a solid foundation for our exports in EU market. Then, our officials should be long-sighted enough to make up their mind to change the way our economy develops and enlarge native consumption. There is no doubt that more outlets of native goods will reduce the risk when our companies encounter the crisis like European Sovereign Debt Crisis. Next, our companies should change the method of their protecting rights. They should unite to solve the troubles they all suffer. Fourthly, our companies, with the help of governments, should improve their R&D and brand marketing abilities. Only by improving these abilities, can our companies have splendid future in EU market, even in global market, at any time. At last, our companies should pay more attention to preparation before transactions so as to avoid EU companies’breaking the contracts.The last chapter sums up the whole dissertation and demonstrates the significance in the academic circle. So far, it has been just3years after the crisis happened. Therefore, there are few scholars who summarize the counter-measures against the crisis’impact on China’s export to EU. The dissertation aims to making a little contribution in this point and appeal to scholars to pay more attention to it.

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